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June 24, 2013

Online Donations Surged in 2012

Nonprofits push to score more online donors

Online donations to U.S. nonprofit groups are growing much faster than other types of gifts, according to new research by The Chronicle of Philanthropy.

The Chronicle found that online donations in 2012 grew to $2.1 billion, a 14% increase from the previous year, based on information provided by online-fundraising processors Blackbaud, Network for Good and PayPal.

Online giving to the country’s biggest charitable groups also grew by 14%, it said.

Meanwhile, the Chronicle noted, total donations grew only 3.5%, or 1.5% adjusted for inflation, according to Giving USA's yearly study.

Notwithstanding continued growth, online giving still accounts for only a small fraction of most charities’ budgets. According to the Chronicle’s research, the median share is just 2.1% of all donations from private sources for the large charities surveyed.

That’s changing. Nearly three-quarters of the groups surveyed had a goal for online donations to account for more than 10% of their overall fundraising efforts in coming years, and about a fifth expected Internet gifts to account for as much as 20% of their overall donations.

The Chronicle study found that many nonprofits were increasing their online revenue by persuading people to make gifts monthly, quarterly or over another set period.

Six groups reported earning at least half of their online-giving totals from people who had committed to monthly or other regular withdrawals from their bank accounts or credit cards.

Some nonprofits achieved big gains last year by enlisting their supporters to reach out online to friends and relatives. Others focused their online efforts on young donors.

Respondents also reported that they were attracting more large gifts. The University of Texas M.D. Anderson Cancer Center received $1 million, its largest gift online, while six other groups reported at least one gift of $100,000 or more online.

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